Web services in action

Web services may be the latest hot topic of conversation, but for many companies, that's all the technology amounts to -- talk. Not so for four pioneering companies where Web services are already in operation and paying big dividends. We talked with IT managers at these organizations about how they've learned to exploit the technology by reusing Web service modules and better integrating their own internal business processes with those of external partners.

Bank Cuts Production Time, Speeds Payment Delivery

For years, Wells Fargo & Co.'s wholesale banking operations dealt with a polyglot of methods for handling wire transfers and interbank electronic payments for its 100 largest corporate customers. Those customers sent payment instructions in formats such as EDI, flat files and XML, which forced Wells Fargo to build separate channels to tie each customer's data into the bank's back-end systems.

No longer. The banking giant's ePayment Manager Web services module now examines and parses payment data in a wide variety of formats and sends it to Wells Fargo's back-end systems, where payments are processed and customer acknowledgments are sent.

Rather than build a custom setup for each customer, existing Web service modules are snapped together in Lego-like fashion. "Using Web services reduces [account setup] times by 30 percent to 50 percent for each new customer we add," says Steve Ellis, executive vice president of the Wells Fargo wholesale services group in San Francisco. The bank saves development time and money, and customers don't have to spend time and money altering their data formats.

The bank started work in April 2002, and the system was in operation by November of that year.

Lessons Learned: Ellis' advice for others looking to build Web services has nothing to do with technology and everything to do with management. "We make the technology and the business people sit together so they understand one another before we begin," he says. "That's the most important thing you can do. You need the business people to 'get' IT, and the IT people to 'get' business."

Vendor and tool: webMethods' webMethods Integration Platform.

Retailer Integrates With Business Partners, Cuts Telecommunications Costs

At Things Remembered, the largest personalized gift retailer in the U.S., Web services are helping to speed up deliveries to customers. Before the Web services technology was in place, when a customer ordered a monogrammed vase from Things Remembered's online partner 1-800-Flowers.com, the gift retailer had to pull that order manually from the florist's Web site. That process took time and didn't tie the order into Things Remembered's real-time inventory system. To solve the problem, parent company Cole National built a Web services module that directly ties the 1-800-Flowers.com site to the Things Remembered order-entry systems.

Now that the company has built a basic tool kit of Web services objects, it will reuse them as part of a larger Web services initiative, says Mark Fodor, director of e-business at Cole National. That initiative will include integrating with other online business partners, he says.

In addition, Web services will eventually be used at point-of-sale systems in the 760 Things Remembered retail stores, says Fodor. Currently, managers must dial into the Cole internal network to check on inventory. The stores also connect to the Internet through an Internet service provider. But because a Web services application has already been built that ties into the inventory system, the Internet connections will eventually be used to check on inventory. That will save telecommunications costs and reduce the time it takes to confirm customer orders, he says.

Lessons Learned: The key to developing a Web services application, Fodor says, "is to make whatever you build reusable, so that you can plug it in for other purposes. We built ours with that mind-set, and it's paying off."

Vendor and tool: IBM's WebSphere.

Health System Speeds Access to Patient Information

With an enormous amount of data and disparate computing systems, the health care industry is a natural fit for Web services. Providence Health System, a $3.3 billion health care provider in Seattle, is a case in point. It uses Web services for enterprise application integration and to build small CRM systems. As a result, Providence cut its development costs, decreased the amount of time it takes to bring a new service for customers to market by 30 percent to 50 percent and now provides patients and health care workers immediate access to patient information.

Mike Reagin, Providence's director of research and development, says the company "is very distributed, and so we have many in-house legacy systems, from old Mumps systems to new Microsoft ones, and we needed a consistent way of aggregating data from all of them."

The company started development work on Web services last spring and had its first module working within four weeks -- a far faster turnaround time than for projects using other types of technology, Reagin says. Patients can now look up benefits information online and use a portal for transactions. Providence has relationships with WebMD.com and Wellmed.com, so when patients log onto those Web sites, all their personal information (height, weight, date of birth) is already populated via Web services modules that link to Providence's back-end systems.

Similarly, doctors can connect to a portal that aggregates patient information from all of Providence's clinics, hospitals and offices. The portal "improves clinical care and patient care, and hopefully reduces costs and increases efficiencies," Reagin says.

Lessons Learned: Reagin recommends getting the right tool set and management platform in place before launching. "Going into development we were worried, What if we have a hundred Web services out there, how would we manage them all? Would it get chaotic?' " he says. By first choosing a platform, he says he's been able to keep track of all the Web services modules and reuse existing ones.

Vendor and tool: Infravio's Web Services Management System.

Student Clearinghouse Benefits From Immediate ROI

The National Student Clearinghouse (NSC) has developed Web services that significantly cut the time it takes for employers, loan providers and others to verify that job applicants hold degrees from the colleges they claim to have attended. The nonprofit association expects to pay back the entire cost of its Web services development in a single month.

The NSC maintains a database of student records from more than 2,700 schools and verifies student records for a fee. Its database is accessed more than 100 million times annually, mostly by large screening firms, says Mark Jones, NSC's vice president of marketing and business development.

The problem had been that those screening firms didn't have direct access to the NSC database and would open a record in their own databases and call the school directly with a verification request instead of going through the NSC. If they did contact the NSC directly, they had to call on the phone and ask staff members to verify the information, an expensive and labor-intensive process.

The solution? NSC built a Web services application that ties screening company databases directly into the NSC database. Jones estimates that development costs were $25,000, which can be recouped in one month in increased revenue and lowered costs.

Lessons Learned: Jones' advice concerns business practices, not technology. "What surprised me the most is that there really haven't been technical issues -- the technology itself is almost trivial," he says. "Most important is to make sure that the business model is right -- make clear why you should do this with a trading partner, and calculate your ROI ahead of time."

Vendor and tool: Flamenco Networks' Web Services Management software.

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